High fuel prices blamed for business failures

Jerald Arop, 33, is a bodaboda cyclist in Gulu town. He is having trouble meeting his family’s needs, because of what he says is higher fuel prices that is driving away customers.

“It has been difficult to explain to our customers that the price of fuel has gone up, so charges have changed. Some people just choose to walk. Others feel that adding 500/= or 1,000/= on top of their usual fare is too much.” Arop says that in recent weeks, fuel prices have risen by more than 20% from UGX 3,500 to now UGX 4, 000 a litre.

Alex Ochola, a resident of Layibi central sub-ward in Layibi division, says that for the past two weeks he has been paying double his usual fare to and from work. “I traveled to Kampala on Sunday and I paid UGX 30,000. Now to my home, I pay 2,000/= instead of 1,000/=. Sometimes I negotiate and pay 1,500/= which is too much, considering other movements that I make within the town during my work,” he explained.

Patrick Oloya says previously, he would need about UGX 15 000 worth of petrol for the whole week, but since prices increased, he has to add an extra UGX 5,000. The problem has been exacerbated by a shortage of fuel because of supply interruptions.

Last week, Delta Petro station in Gulu town spent days without fuel, a situation managers said created artificial scarcity and kept prices at other stations to remain high. Victor Omony, the station manager at Delta says the station lost as much as UGX 20 million on account of the shortage.

“We have not had fuel for about a week and I can’t tell why. Our major challenge now is with prepaid clients in Amuru and Gulu District local governments because they need fuel for their road works and we can’t say no because they have paid for it already. I tried buying from others to supply them but I stopped because the shortage has prolonged. This is a big loss. Clients are disappointed and some don’t easily come back,” Omony noted.

Pump price increases in the past one month in has its roots in the increase in the price of crude oil – which rose to a record 70 dollars a barrel in more than three years. The increase is attributed to a decision by OPEC member countries to reduce production which came during record low temperature across Europe and the America’s – a period that is associated with high consumption.